Politics Matter

Posted
on November 19, 2011, 11:20 am

In a new CEPR report (pdf), Alexandra Mitukiewicz and I argue that the national political environment, not globalization or technology, is the most important factor driving long-run changes in unionization rates in the United States and other rich economies.

Since 1980, changes in union coverage (the share of the workforce covered by a collective bargaining agreement) are strongly correlated with a country’s postwar political tradition. The largely social democratic, Nordic countries, for example, actually saw increases in union coverage over the last three decades. The “continental market economies,” such as France, Germany, and Italy, generally saw small declines in union coverage. But, in the “liberal market economies,” such as the United States and the United Kingdom, coverage rates generally tanked (Canada is an interesting exception).